Death comes to us all. Life's but a walking shadow | I've been listening to this argument about the purpose and use basis for some time now and I come to believe that basis is just a "nasty little trick" to allow grain buyers to fug the price whenever the futures price is inconvenient. Take Kggonzo's example above. The cash price for the next three months is essentially the same. ADM doesn't want to pay for storage or risk (carry) and tells it suppliers: "see that higher futures price for April, etc. we just don't believe we have play by those rules so take a hike." Probably "lump it or leave it" is more apt.
Can somebody convince me otherwise?
I know what you are going to say Maizing but what is it to me that when we make an agreement for me to deliver corn (or something else) what the possible change in price might be? That is your problem isn't it? You want corn delivered sometime in the future for a certain price. I'll agree to supply you at the time agreed on but why should I take a share of the risk that you might lose some money if the price changes? After all I've already got the risk of delivery.
But go ahead and say it anyways, please.
Edited by 1234 2/4/2014 21:20
|
end users might start singing a different tune
